NLRB Advice on Lawful Employment At Will Provisions Under the NLRA

On October 31, 2012, the National Labor Relations Board (NLRB) Office of General Counsel (G. C.) issued two Advice Memoranda clarifying whether employment at-will language in an employee handbook, applications or other employment policies violates the National Labor Relations Act (NLRA) by “chilling” employee rights under Section 7 of the NLRA.[1] Concern had arisen among employers as a result of findings in an earlier unfair labor practice charge (ULP) indicating that certain employment at-will provisions violated the NLRA. The Advice Memoranda reflect a commonsense approach by considering the context of most at-will employment provisions in employee handbooks.

In the first Advice Memorandum, the NLRB Office of General Counsel considered the following language in the Rocha Transportation Employee Handbook:

Employment with Rocha Transportation is employment at-will. Employment at-will may be terminated with or without cause and with or without notice at any time by the employee or the Company. Nothing in this Handbook or in any document or statement shall limit the right to terminate employment at-will. No manager, supervisor, or employee of Rocha Transportation has any authority to enter into an agreement for employment for any specified period of time or to make an agreement for employment other than at-will. Only the president of the Company has the authority to make any such agreement and then only in writing.

In the second Advice Memorandum, the Office of General Counsel considered the following language in the Mimi’s Café Teammate Handbook:

The relationship between you and Mimi’s Café is referred to as “employment at will.” This means that your employment can be terminated at any time for any reason, with or without notice, by you or the Company. No representative of the Company has authority to enter into any agreement contrary to the foregoing “employment at will” relationship. Nothing contained in this handbook creates an express or implied contract of employment.

In the ULP charges filed against Rocha Transportation and Mimi’s Café, the claimants alleged that the bolded language in the handbooks violated the NLRA “because it is overbroad and would reasonably chill employees in the exercise of their Section 7 rights.”

In rejecting these claims, the NLRB Office of General Counsel stated that any language that potentially violates the NLRA cannot be read in isolation but must be considered in context. The employment at-will policies at issue did not explicitly restrict employee Section 7 rights to change their at-will employment status through concerted activity among themselves, or through union organizing. Further, there was no indication that the policies were implemented in response to union organizing or that the policies had been applied to restrict protected concerted activity by employees. Thus, the handbook provisions would only be unlawful if employees would reasonably construe the policies “in context” to restrict their Section 7 activities.

The G. C. concluded that the handbook provisions did not require employees to refrain from seeking to change their at-will status or to agree that their at-will status could not be changed in any way. Instead, the handbook provisions simply made clear that the employer’s own representatives were prohibited from entering into employment agreements that would provide for other than at-will employment and were not authorized to modify an employee’s at will status. The Rocha Transportation provision clearly indicated the possibility of a modification of the at-will relationship through a collective bargaining agreement ratified by the company’s president. Further, the clear meaning of the Mimi’s Café provision was to reinforce the purpose of the at-will policy, i.e., that the handbook did not create an express or implied contract of employment. The G. C. noted “[i]t is commonplace for employers to rely on [such] policy provisions . . . as a defense against potential legal action by employees asserting that the employee handbook creates an enforceable employment contract.”

The G. C. distinguished the prior American Red Cross Arizona Blood Services Region case which had raised concerns among employers about the liability of at-will disclaimers. In that case, the employer was held to have violated the NLRA by maintaining the following language in an acknowledgement form that employees were required to sign: “I further agree that the at-will employment relationship cannot be amended, modified or altered in any way.” The G. C. stated that this language required the employee – through the use of the personal pronoun “I” – to agree that at-will status could not be changed and was “essentially a waiver” of the employee’s right “to advocate concertedly . . . to change his/her at-will status.”

The NLRB guidance on at-will provisions in employee handbooks, employment applications, employee acknowledgment forms and other employment documents has clarified that at-will policies phrased in terms of what the employer can and cannot do, rather than what employees can and cannot do, generally will not violate employee Section 7 rights under the NLRA. Employers should carefully review their employment at-will policies for compliance with the NLRA.

James H. Kizziar, Jr. is a partner with Bracewell & Giuliani LLP in the firm’s San Antonio, Texas and Washington, D.C. offices. Judy K. Jetelina is counsel with the firm. Both Mr. Kizziar and Ms. Jetelina represent management in all aspects of labor and employment law.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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